LETTER: B.C.’s speculation tax is a wealth tax when it comes to second properties

B.C.’s speculation tax is bearing down on us and raising more questions: What is the rational of exempting areas with rental crises while not exempting rural areas without rental problems? Who is getting a free pass? Is this tax actually just about speculation and vacancy?

Two very similar areas are treated very differently by the NDP. Both are residential seaside communities with summer cabins and vacation homes. One is exempt and the other isn’t.

Belcarra is not exempt from the speculation tax, while Lions Bay is. There has been no explanation for this anomaly other than Belcarra is, in its mayors’ words, “collateral damage.”

Finance Minister Carole James promised: “People with cottages at the lake, or cabins, or on the islands, will not pay this tax. People with second homes outside of high cost urban areas will not pay the tax. We’re going after those who are clearly taking advantage of the market and driving up prices. We’re ensuring housing stock in our major cities is available for people who work hard and live in those cities.”

So why is a rural area without road access to 20 per cent of their dwellings targeted?

This is despite recognition that access might be an important aspect of rental accommodations: “Islands that are accessible only by air or water are not part of the taxable regions.” Perhaps there is a clue in Belcarra NDP MLA Rick Glumac’s alleged comment at an open house, Sept. 29: “I work hard too, but I don’t own a second house.”

An examination of his public disclosure statements reveals Glumac’s spouse with investment property in Colorado, and four MLAs with investment and/or recreational property in exempt areas.

Not really very startling, except for the fact that Andrew Weaver, the Green Party’s prop to the NDP’s minority government, owns investment property in Parksville.

A cynical mind might conclude that in order to get Weaver (“Now my job is to get the NDP to recognize it’s a stupid tax and get rid of it”) on board, the originally nonexempt Parksville would need to be made exempt.

A cynical mind would conclude it worked: From his blog: “We ensured that the B.C. NDP government did not fall in their declared confidence measure while at the same time working tirelessly to ensure that many of the unforeseen consequences of the poorly-thought-through speculation and vacancy tax were mitigated.”

One might wonder if the mitigation came in the form of an exemption. Weaver’s Parksville investment properties will increase in value. Realtors are already highlighting “spec tax exempt” in their listings.

And one might wonder if the rental-accommodation-challenged Gulf Islands suddenly got their “nonexempt” turned into an “exempt” because their MLA is Green.

How about the Juan de Fuca Electoral Area represented by John Horgan? Exempt. Granted, Langford, close to Victoria, is not included in this exemption.

But cynical minds might deduce exempting Langford and Victoria (James’ riding) would be unswallowable by the public.

Looks very bad for the premier to have his riding exempted without being seen to sacrifice something. Presto! Voila! No preferential treatment there. Except for MLAs who own property on Vancouver Island…

Out of 34 MLAs who own more than one property, 14 NDP and two Greens do so in Victoria. Four Liberal MLAs have disclosed the same. What is intriguing about this is that spouses who live apart are exempt from the tax if “one principal residence is on Vancouver Island and the other residence is not on Vancouver Island.” This directly benefits MLAs who have invested in property within commuting range of the legislature.

According to James: “Only those who hold multiple properties and leave them empty in our province’s major cities will be asked to contribute.”

Apparently not so much. If MLAs only use their Victoria properties when the legislature is sitting, their properties are empty for the majority of the year. What? But MLAs only bought their places so they’d have a place to stay in Victoria and they can’t stay in them if they rent them out! Seems a little self-interested to neatly exempt themselves from a tax they have no problem extracting from others.

Is the tax just a tricky way for the NDP to get into the property tax game?

Second homes will create a continuing stream of revenue as long as the owners don’t rent them out. As many vacation homes are uninhabitable or unrentable in cold weather, water access only, or used year-round by the owners, the revenue stream is guaranteed not to go dry.

“People with cottages at the lake, or cabins, or on the islands, will not pay this tax.” Then why is there not a blanket exemption for these places instead of a $400,000 credit? A cynical mind might conjecture a $400,000 credit can be lowered or removed in the event of government coffers running low.

Which brings us back to Belcarra’s MLA: “I work hard too, but I don’t own a second house.”

A cynical mind would surmise the government’s intention is to eventually tax all vacation homes – that second homes are fair game. Belcarra is the precedent that puts a lie to “We’re going after those who are clearly taking advantage of the market and driving up prices.”

The speculation tax should target foreign buyers who have done their money laundering through B.C. real estate, who have driven our prices into the stratosphere, and who are leaving vacant condos in their wake.

When it targets second properties of British Columbians, it is a wealth tax. But then again, a cynical mind would theorize that was the plan all along.

Ingrid Rice is a political cartoonist who lives in North Vancouver

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